Form 6198 line 10b

Technical topics regarding tax preparation.
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jcpa  
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Hi, my question is on the At Risk Form 6198, Part II, line 10a - the instructions say not to include current year income or loss in Part II, but to include all other items that increase or decrease the at risk basis. Also the instructions say if after all increases and decreases line 10b is zero(or a negative #) that prior year losses which were deducted may have to be recaptured. The zero or negative amount on line 10a can occur when cash distributions are paid from a partnership or S Corporation which exceed the beginning basis plus or minus the increases and decreases, not including the current year income and expenses.

The question is why would one have to recapture prior year losses from the Part II line 10a computation if the current year income is not considered in Part II, when the at risk basis is supposed to be a year end calculation? Perhaps I am misreading the Form 6198 instructions?

Any help will be appreciated.

Thanks

jcpa
 

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